The government will unveil “additional steps necessary” soon to stimulate economic growth after consulting the prime minister, finance minister Arun Jaitley said on Wednesday. The GDP growth hit a three-year trough of 5.7% in Q1FY18. “We have taken note of all economic indicators which are available… the government will take any additional moves which are necessary. I am not in a position to announce (the steps) today… I will be certainly consulting the prime minister before (unveiling the measures),” he said. The minister also indicated that public spending won’t be slowed, given the important role it is playing to spur the economy. On Tuesday, Jaitley had deliberated on the state of the economy with his Cabinet colleagues and senior officials with an aim to devise a plan to lift growth.
Highlighting that this is a “proactive government,” Jaitley said: “I have had a series of discussions with some of my colleagues, secretaries and other experts within the government.” The Prime Minister’s Office had asked the finance ministry to hold discussions with key ministries and stitch together a comprehensive presentation on ways to create massive jobs and stimulate economic growth. The finance ministry will prepare the road map on government revenue and spending, based on consultations with the ministries, including the railways and transport and highways. Given the limited fiscal space available, the government intends to adopt a targeted spending method for which identifying key sectoral issues are important, said a source. However, cutting excise duty on petroleum products, which fetched `2.42-lakh-crore revenue for the Centre in FY17, won’t be easy. “You should remember that the government needs revenue to run. How will you build highways?” Jaitley responded when asked about the possibility of excise duty cuts in petroleum products. “Whatever (GDP) growth is there, it is fuelled by public spending and FDI. If public spending is slashed, it will mean cutting down expenditure on social sector schemes,” the minister said.
Steps to improve exports will be prepared after discussions with commerce and industry minister Suresh Prabhu, he said. Some of these proposals could find their ways into next year’s Budget. Sectors with potential to create jobs and ways to improve private investments will be in focus, while the government intends to sort out teething troubles in the implementation of the goods and services tax (GST) fast so that its benefits are reaped at the earliest.